Mark Whitehead 21 February 2018

Should councils be launching their own charities?

Should councils be launching their own charities? image

News from the north London borough of Barnet about a charity being launched to help children in care is cheering.

According to the council, it will mean the youngsters can ask for money to pay for activities such as football or ballet lessons, theatre trips and out-of-school activities - extras to provide the kind of experiences many other children take for granted.

The venture is 'based on the vision that every child who spends time in care or has left care should have an equal chance to lead a happy and fulfilled life'.

No-one could argue against looked-after youngsters being given the best opportunities available - they deserve every bit as much help and support as their friends from established families.

And the generosity and goodwill of all concerned in setting up the new venture is thoroughly laudable - including a building firm and a locally-based rugby club.

Some may argue, however, that if extra support is needed it should be provided directly by the local authority itself, paid for out of the council tax and monitored by the elected members, rather than through the goodwill of charitable residents.

This story follows hard on the decision by Westminster council to ask wealthy local volunteers to pay double the normal council tax in order to help with finances.

The fear is that we may be witnessing the return of an age when the weak and vulnerable had to rely on charity to provide their everyday needs.

It is hard to see, on the face of it, why a council would want to set up a charity. Complying with Charity Commission regulations is not something to be taken lightly and there are unavoidable costs in terms of management and administration.

Crucially, a charity must be run by its trustees as an independent organisation. The council is not entitled to interfere with its decisions and will fall foul of the Commission if it tries to do so.

Croydon Council found this out when it wanted to become a trustee of a charity set up to refurbish the prestigious Fairfield Halls concert venue. It was planning to invest in the project and wanted to 'ensure its funding was being used to best effect'.

The Commission, however, ruled against the council saying 'it would have effectively meant the takeover of the charity by the local authority in a way that allows the authority to influence decisions made by the charity in its own, rather than the charity’s interests.' In the end the council backed down and withdrew its proposal.

In another case in Liverpool, the council was ordered to pay £89,000 to a charity it ran to support special schools in the area. The Commission found the council had allowed one of its employees to live in a lodge on the charity's land as a caretaker rent free for more than 20 years, resulting in a loss to the charity of more than £90,000 in market rent.

This, the Commission said, was not in the best interests of the charity and was a breach of the council's duties as a trustee. The council paid £89,000 into the charity's bank account to rectify the loss caused to it.

Just as important, perhaps, relying on voluntary contributions, while encouraging the best of human instincts, is by its nature unpredictable. For young people already often coming from difficult home backgrounds, stability is paramount, and it may be hard for them to receive generous extras one year only to find they have disappeared the next.

Further, the youngsters concerned will have to apply for the grants. Some may resent having to fill in a form to apply for charity to pay for activities which others are given without question by their mum and dad.

However, it has to be assumed that the responsible officers and councillors of Barnet have taken all this fully into account and that Live Unlimited will be run in a thoroughly professional manner. There is no reason to think otherwise.

There are many established charities offering all sorts of benefits to young people and it may be very sensible for Barnet to have a locally-run organisation focused specifically on children and young people in its care or who have recently left its care.

The new venture comes at a time when local government is increasingly entrepreneurial and open to new ways of doing things. This is just the latest example of something that would be have been unheard of just a few years ago, in an attempt to harness the generosity and energies of local people.

The fact is, assuming all goes well, there will be many youngsters in Barnet who will benefit from the initiative. Money spent to provide constructive leisure activities for young people is well spent, from wherever it may come.

Most observers will conclude that if Barnet's new charity helps just one young person in care develop an interest and prepare for a happy and fulfilling life, it will have been worthwhile.

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